The management of events and actors involved in insurance loss are traditionally handled through disparate, inefficient client-burdened systems with misaligned interests. The processes employed are commonly passive and operate after peril has occurred. Further, typical outcomes create dissatisfaction among the participants, in particular the insured policyholder, and routinely breed opportunities for insurance fraud. A need exists for a fundamental paradigm change in the management of insurance loss that aligns stakeholder interests, removes or reduces the role of the insured policyholder as the manager of the insurance loss process, and enables efficiencies that reduce costs and fraud.
Most insurance policyholders have fairly cynical viewpoints with respect to how benevolent their insurance companies and insurance agents are with respect to the customer's true desire to remain protected in the event of a catastrophe. Thus, it is unprecedented for insurance agents to proactively contact policyholders to warn them of impending physical events that may cause damage to items that are covered or otherwise encompassed under an insured's policy. Most communications between a policyholder and an insurance agent and company are limited to the initial contacts, where there is great incentive on the part of the insurance company to sign up a new policyholder, and then less cordial communications around events where policyholders make claims against their policy and thereafter have oftentimes adversarial dialogue and discussions with the insurance company and the agent with respect to whether a particular event is covered under policy language. Indeed, an entire insurance defense industry has been established and a great body of judicial precedent has been handed down over the decades to deal with how insurance policies are fairly interpreted when such disputes arise. Furthermore, oftentimes communications between a policyholder and an insurance agent can themselves be used as a basis for “bad faith” insurance claims, wherein a policyholder accuses the insurance agent and/or insurance company of unreasonably refusing to cover events, with the insurance company arguing that particular contractual language exists to preclude coverage. In brief, the history of insurance companies interactions with their insured's, while starting initially as mutually beneficial, often devolve into communications that are outright adversarial, costing both the insured and the insurance companies considerable time, effort, money and good will, in order to resolve disputes with respect to coverage issues.
There is also a lack of a comprehensive solution to address appropriate and commercially reasonable responses to peril between all stakeholders. The interaction between insurance agents and a policyholder is only one aspect of the overall process. To spread risk of loss, insurance agencies work with re-insurers. Simply stated, reinsurance is insurance for insurers. Just as individuals buy insurance in case of peril and for loss they do not wish to bear, insurers purchase reinsurance for risks they do not want to fully retain. Like insurers, re-insurers use the same techniques and models for risk selection. Also like insurers, re-insurers are often pre-funded through premium payments and pursue similar general approaches to asset liability management. Since insurers and re-insurers have similar business models, their interests are often aligned. For example, re-insurers have a central interest in understanding the risk of the insurance companies in order to accurately price and manage risks covered by a re-insurance policy. Re-insurers may require insurance companies to share certain information, such as information in the insurer's underwriting portfolio. Re-insurers may also share their knowledge of risk information, which can extend over a wide range of hazards and geographies to help with risk management.
U.S. Pat. Pub. No. 2009/0006139 published to Wait et al. (“Wait”) provides a general overview of traditional insurance claim processing. Wait's methods for processing claims create a claim management case for an insured in response to a notice of a claim. One or more insurance policies covering the insured are associated with the claim management case. A process is performed at a claim management case level to fulfill an information requirement that applies to at least two of the insurance policies associated with the claim management case. Claims are adjudicated under the one or more of the insurance policies covering the insured. Typical of traditional insurance claim processing, the claim processing is performed after an event, and the client policy holder is required to actively involve himself in the claim process management. Wait is incorporated by reference in its entirety.
U.S. Pat. Pub. No. 2011/0137685 published to Tracy et al. on Jun. 9, 2011 (“Tracy”) provides a typical approach to insurance loss management, albeit with computer-automated components. Tracy discloses a system centered around the customer (see Prior Art Figure) particularly applied to inland marine insurance. The Tracy system includes a loss mitigation computer system with a customer interface electronically receiving customer information data from a customer computer system via a communications network. A risk assessment computer processing module processes the customer information data and identifies a peril associated with the customer information data. A risk mitigation computer processing module generates a risk mitigation option based on the peril and receives customer selected risk mitigation options responsive to the generated risk mitigation option from the customer computer system. Further, a customization computer processing module generates a calculated insurance premium, a current risk assessment, a future risk assessment, recommendations, and a gap analysis based on the customer selected risk mitigation option. In Tracy, the insured policy holder essentially serves as the general manager of the insurance loss system. Tracy does not provide proactive or real-time management of insurance loss minimization. Tracy is incorporated by reference in its entirety.
U.S. Pat. Pub. No. 2011/0213628 published to Peak et al. on Sep. 1, 2011 (“Peak”) provides some real-time management of insurance loss as related to vehicle losses. Peak provides detailed information to a policyholder about geographical areas which pose a high risk of loss, thereby allowing users to proactively avoid those areas. The accuracy of the information is improved by allowing mobile device users to provide updates about losses and related information while they are at or near an area at which a loss was suffered. Such updates may be used to initiate and process insurance claims associated with a loss. The information may also be used, pursuant to some embodiments, to price and underwrite certain policies, providing improved coverage and pricing for individuals based on their usage and driving patterns. Peak provides no comprehensive real-time solution for the management and minimization of insurance loss. Peak is incorporated by reference in its entirety.
Some effort has been made by the insurance industry to apply principles and/or elements of so-called “customer communications management (CCM)” to, for example, improve the effectiveness of the interactions between policyholders and insurance representatives. A common challenge with implementing CCM has been to apply it only within limited units or functional areas of a business (e.g. solely in marketing, distribution or claims) rather than comprehensively across all areas of an insurance business enterprise. As such, resulting improvements have been limited. For more background on CCM, see, for example, U.S. Pat. Pub. No. 2006/0149571 published to Birch et al. on Jul. 6, 2006 (“Birch”). Birch discloses systems, methods, and computer programs for unifying management of customer messages and responses in an enterprise across a plurality of channels. One embodiment is an enterprise system comprising: a plurality of enterprise applications for interacting with customers via a plurality of channels, and a communication management framework for managing messages to be presented to the customers and customer responses to the messages across the plurality of enterprise applications. Birch is incorporated by reference in its entirety.
Thus, the prior art does not provide a comprehensive management and minimization of insurance loss system in which insurance perils and insured assets are monitored, potential perils to insured assets are assessed, possible actions are determined, and selected actions are executed involving actors such as the policyholder, insurance agent, mitigation responder, and insurance appraiser. The prior art does not align stakeholder interests, remove or reduce the role of the insured policyholder as the manager of the insurance loss process, and enable efficiencies that reduce costs and fraud. Further, the prior art does not address damage mitigation during peril, and incident management after peril, to the policyholder and/or insured assets. Other similar problems can be found not only in other insurance industry fields, e.g. health care, etc., but are also present in other industries, such as the construction industry. The long felt but unsolved needs in these diverse industries is met via implementation of the various embodiments of the invention as set forth herein, addressing in particular the two principal areas of damage/loss mitigation and how best to address post damage/loss management in a fashion that is efficient, cost effective, employs recent advances in technology at the consumer level, and that provides the tremendous financial savings for the insurance and other industries that may employ the present invention. The system and method of the current invention described below addresses these deficiencies and problems.